Question:
Find the amount to be paid if Thomas borrowed a sum of $5800 at 3% simple interest for 8 years.
Correct Answer
$7192
Solution And Explanation
Solution
Given,
Principal (P) = $5800
Rate of Simple Interest (SI) = 3%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% per annum.
Method (1) Using Formula
Calculation of Simple Interest
Formula to Calculate Simple Interest
Simple Interest (SI) = Principal × Rate × Time
Thus, Simple Interest (SI) = $5800 × 3% × 8
= $5800 ×3/100 × 8
= 5800 × 3 × 8/100
= 17400 × 8/100
= 139200/100
= $1392
Thus, Simple Interest = $1392
Calculation of Amount
The total money paid to the lender by a borrower is called the Amount.
In other words, sum of priciple and interest is called the Amount.
Formula to Calculate the Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $1392
= $7192
Thus, Amount to be paid = $7192 Answer
Method (2)
Calculation of Amount when Principal, Rate of Simple Interest and Time are given
Calculation of Amount directly using Principal, SI, and Time
Formula to calculate the Amount
Amount (A) = Principal (P) + Principal(P) × Rate of Interest (SI) × Time (t)
⇒ A = P + PRT
Here in the question, P = $5800
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 8 years
Thus, Amount (A)
= $5800 + ($5800 × 3% × 8)
= $5800 + ($5800 ×3/100 × 8)
= $5800 + (5800 × 3 × 8/100)
= $5800 + (17400 × 8/100)
= $5800 + (139200/100)
= $5800 + $1392 = $7192
Thus, Amount (A) to be paid = $7192 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $5800, the simple interest in 1 year
= 3/100 × 5800
= 3 × 5800/100
= 17400/100 = $174
Thus, simple interest for 1 year = $174
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $174 × 8 = $1392
Thus, Simple Interest (SI) = $1392
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $1392
= $7192
Thus, Amount to be paid = $7192 Answer
Similar Questions
(1) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $9548 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Thomas borrowed a sum of $5800 at 2% simple interest for 7 years.
(3) If Jessica borrowed $3750 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(4) How much loan did Michael borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6360 to clear it?
(5) Find the amount to be paid if Robert borrowed a sum of $5100 at 9% simple interest for 8 years.
(6) Find the amount to be paid if Barbara borrowed a sum of $5550 at 9% simple interest for 7 years.
(7) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 10% simple interest?
(8) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6622 to clear the loan, then find the time period of the loan.
(9) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $14000 to clear the loan, then find the time period of the loan.
(10) How much loan did Emily borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7762.5 to clear it?